5 compelling reasons to consider taking out income protection and critical illness cover
Protection is the foundation of your financial plan, ensuring that you can still live your desired lifestyle and achieve important goals, even when things take an unexpected turn.
Life insurance is the best-known form of protection, paying a lump sum to your surviving beneficiaries when you pass away. This could be a valuable lifeline, allowing loved ones to clear the mortgage, pay general living expenses, or boost their retirement savings.
However, there are other types of protection – such as income protection or critical illness cover – which could be equally important but are often overlooked.
According to IFA Magazine, data from May 2024 showed that 28% of UK adults had life insurance, while only 13% had critical illness cover and just 6.2% had income protection.
Read on to learn five compelling reasons to consider taking out critical illness cover and income protection.
1. Being out of work could make it difficult to cover short-term costs
If you fall ill and can’t work, your financial security may suffer. While your employer might offer some sick pay, this won’t last forever. In 2026/27, the Statutory Sick Pay (SSP) you receive from the government is the lower of £123.25 or 80% of your earnings.
This means that, if you’re out of work for an extended period, your income could fall significantly. While you may have emergency savings to make up the shortfall, these will eventually run out, too.
At this point, you could find yourself struggling to cover regular expenses such as your mortgage and utility bills, resulting in serious financial difficulties.
Income protection provides regular payments to replace part of your salary if you’re unable to work. This means you can cover your expenses and avoid falling behind on bills.
Additionally, you protect your emergency savings and retain an important buffer against unexpected bills.
2. Your long-term financial plan could suffer if your earnings fall
It’s not only your regular expenses you should consider if you’re unable to work for a period because you could also miss out on contributions to your pensions, savings, and investment accounts.
When you contribute to long-term investments, you may benefit from compound growth over the years. This means that each year, you receive growth on your returns from the previous year, as well as your initial investment. Compound returns can snowball in the long term, significantly increasing the size of your pot.
That’s why missing out on contributions earlier in life can make a marked difference to your financial security later, and you may struggle to achieve your dream retirement.
Although the payments likely won’t match your full salary and you may need to reduce contributions, you can continue building your savings if you have income protection. Meanwhile, if you don’t have income protection and are unable to work, you may not be able to save for the future at all.
3. A serious illness could significantly increase your outgoings
Critical illness cover pays a lump sum if you’re diagnosed with a qualifying illness. This could be incredibly valuable, particularly as there may be additional costs associated with ill health.
Back in 2022, Macmillan Cancer Support published a study showing that 83% of people with cancer in the UK face additional financial pressures because of their diagnosis. The average cost was £891 a month on top of their normal expenditure.
Bear in mind that as costs have increased since this study, the financial strain of illness could be even greater in 2026.
So, even if you have income protection to cover your regular expenses, it may not be enough to absorb the extra costs.
The lump sum payout from critical illness cover could help you manage these expenses so you can focus on your recovery instead of worrying about your finances.
4. A critical illness cover payout could help you clear your mortgage
Depending on the nature of your condition, a critical illness might mean you are out of work for years or even need to retire early.
This leaves you and your family in a challenging position because you must survive without your income.
A lump sum from critical illness cover may allow you to clear your mortgage and significantly reduce your monthly outgoings. Combined with regular payments from income protection, this could mean you and your family remain financially stable.
5. 97.9% of protection claims pay out
One reason you might be reluctant to invest in protection is that you worry it won’t pay out when you need it. It’s a common misconception that insurance providers often deny claims, and so it’s not worth paying for income protection or critical illness cover.
The reality is very different.
Data from the Association of British Insurers (ABI) shows that in 2025, insurers approved 97.9% of claims, paying out a total of £7.84 billion.
Income protection payments totalled £209 million – a new record – and the overall value of critical illness cover payouts was £1.25 billion.
So, as you can see, the likelihood is that your protection policy will provide a safety net when you need one.
Get in touch
If you’d like to talk to us about protecting your family from the unexpected, we’ll be happy to help. Please email enquiries@integritasfp.co.uk or call 01283 777014.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
